Tight Gas To Displace Shale

Saudi Arabia | Oil & Gas | Mon Jul 21, 2014

BMI View :Aramco's strategic shift away from shale gas and towards tight gas will offer a more economically viable routetounconventional resource development. However, given various technological and financial barriers to production, we see offshore and associated gascontinueto dominate output growth across our10-yearforecast period.

In its 2013 Annual Review, Saudi Arabian national oil company (NOC) Saudi Aramco made unconventional gas resource development a key strategic focus. More specifically, the company placed a heavy emphasis on shale gas, targeting production of 2bn cubic metres (bcm) per year, by 2018. However, we argued that shale gas development would, under current conditions, prove uneconomic ( see 'Unconventional Projects To See Slow Progress', June 05), and the shift in focus by Aramco seems to confirm us in this view.

Foster Wheeler has been awarded a front-end engineering and design (FEED) contract for work on Saudi Arabia's unconventional gas development programme. The contract covers a five year period and, significantly, will prioritise development of the Kingdom's tight gas, as opposed to shale gas, resources.

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